The ROI Revolution Blog

Two Simple Ways to Boost Customer Value for Subscription-Based Companies

March 30, 2009

With the ever increasing competitive nature of Google AdWords, businesses that rely on recurring revenue from a membership or software-as-a-service (SaaS) subscription model need advanced marketing tactics to stay alive. But merely staying afloat shouldn't be an option -- your goal should be total market domination!

Yet there are unique marketing challenges subscription-based companies face when acquiring new customers. First, it's common to offer a free trial to get new members. Money isn't collected for weeks or months. When marketing bills are due before revenue is collected, this can cause serious cash flow problems.

When you finally do start collecting money from your customers, each monthly payment is only a fraction of the lifetime value of the customer. If you don't have smart marketing or exceptional cash reserves, your custom acquisition will be needlessly hamstrung. All things being equal, those who can afford to spend the most up front to acquire a new customer will dominate their market.

The following two tactics are relatively simple to implement and will dramatically boost your average customer value which will put you in a position to out-market your competition.

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Filed under: Website Optimization
Tagged as: Web Marketing

Posted by Chris Crompton, PPC Specialist at 3:54 PM

Introduction to Google's Ad Auction, Part 2: AdRank and CPC

March 25, 2009

Yesterday, I introduced you to a video released by Google starring their Chief Economist, Hal Varian that explains the Google Ad Auction and Quality Score. In part one of this two part blog series, I reiterated how Google quantifies their formally elusive, Quality Score.

In today's article, I will use the same video and guidance from our Google rep to explain how Google determines your Ad Rank as well as each advertiser's click cost. Some of this post may make you feel like you're back in high school math class, but bear with me. These formulas really do reveal Quality Score's crucial role in the AdWords system and how you can spend less to get more.

AdRank:

AdRank = Max CPC x Quality Score

AdRank is the formula Google uses to assign the position of a keyword targeted ad. It is determined by multiplying the maximum cpc bid that the advertiser is willing to pay by the Quality Score of that advertiser. An ad's position is then determined by the advertiser's AdRank, awarding the highest position to the advertiser with the highest ad rank.

View Enlarged Image

Our example above shows how Quality Score can prohibit advertisers from simply bidding high enough to show in the top position. Even though advertiser Cameron is bidding well above all of his competitors, he will show in the fourth position due to his low Quality Score.

Determining Click Cost:

Actual CPC = (AdRank to beat/Quality Score of Advertiser) + $.01

Each advertiser only pays the minimum amount required to maintain his position.

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Filed under: Online Advertising
Tagged as: Pay Per Click

Posted by Erin Skinner, PPC Specialist at 10:58 AM

Introduction to Google's Ad Auction, Part 1: Quality Score

March 24, 2009

Last Wednesday our agency's Google rep sent over a video put together by Google's Chief Economist, Hal Varian that very clearly explains Google's Ad Auction and Quality Score. The 9 minute video is definitely worth viewing at least once to get a better understanding of two large parts of the AdWords system that were, until now, pretty hard to quantify.

In this two part blog series, I will explain what Quality Score actually is, how the ad auction works, and how Quality Score determines your ads' positioning and costs per click using the video as my guide. Today's article will cover the ever elusive concept of what Google's Quality Score really is.

Google's reasoning for creating Quality Score is to make sure that the best interests of all parties included in the search experience (the advertiser, the user, and Google themselves) are taken into account when a search is performed on Google.com. Below, I've explained the motivation to appeal to each party's interest:

Advertisers want to show relevant ads so that users will click on their ads and land on their site, hopefully intending to purchase something.

Users want to see relevant ads so they can easily find what they're looking for in the shortest amount of time.

Google wants the best experience for both advertisers and users so that advertisers continue to use the AdWords program and so users continue to use Google.com and Google's other host of products.

Until recently, Google's "Quality Score" was an abstract concept with little to no definition. Advertisers wanted to get the highest Quality Score possible, but didn't really know what they were striving for.

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Filed under: Online Advertising
Tagged as: Pay Per Click

Posted by Erin Skinner, PPC Specialist at 3:59 PM

10 Words Or Less: Put Your Unique Selling Proposition To The Test

March 17, 2009

In today's competitive market there are thousands of decisions that people make on a day to day basis. A number of companies seem to blend together when it comes to meeting each of your potential customers business needs. What makes your company different? Why should people buy from you?

A Unique Selling Proposition is a statement, usually 10 words or less, that tells your potential customers why they should hire or buy from you instead of your competitors. Your Unique Selling Proposition (USP) or Value Proposition (VP) should be stated right away on your website to let visitors know who you are and why they should remain on your site. This should be a statement regarding why your company is the better choice, and what makes you unique. Not only should this statement be clearly expressed on your website, but it should be something you build your business around. Keeping this all to about 10 words or less can get tricky, but clarifying what you do best will allow your visitors to qualify themselves for your offer.

Some companies have become known for their value propositions, such as:

FedEx: "When your package absolutely, positively has to get there overnight"

Domino Pizza: "We deliver hot, fresh pizza in 30 minutes or less, guaranteed."

So how should you develop yours?

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Filed under: Website Optimization
Tagged as: Google Website Optimizer, Web Marketing

Posted by Matt Siesing, PPC Specialist at 4:35 PM

Google Analytics Seminar For Success in Miami, FL June 10th & 11th!

March 4, 2009

ROI Revolution is an Analytics Seminar Leader, authorized to conduct LIVE Google Analytics training. We'll be offering two full day seminars in Miami.

The first seminar is to help users explore and understand their data in Google Analytics. The second seminar covers installation and customization techniques to suit the needs of your business. Both sessions feature multiple Q&A sessions so you can get your specific Google Analytics questions answered.

--Location and Cost--